A medical clinic dispenses vaccines at a steady rate of 520 doses per month. Each order placed to the vaccine manufacturer incurs a fixed cost of $140. Each vaccine dose held in inventory incurs a holding cost of $3 per year. Required:a. Using the EOQ model, calculate the optimal order quantity, images , and the optimal average cost per year, images. b. Suppose that the fixed cost K increases. Will images increase, decrease, or stay the same? Briefly explain

a) EOQ = 763 vaccines

annual total cost = $2,289.45

b) if order cost increase, then the EOQ will also increase since the total number of orders placed should decrease in order to keep total costs as low as possible.  

Explanation:

EOQ = √(2SD / H)

s = order cost = 140

h= holding cost per unit = 3

d = annual demand = 520 x 12 = 6,240

EOQ = √[(2 x 140 x 6,240) / 3] = 763.15 ≈ 763

annual total cost = [(6,240 / 763) x $140] + [(763 / 2) x $3] = $1,144.95 + $1,144.50 = $2,289.45

if K (I believe K = S) increases to lets says $200:

EOQ = √[(2 x 200 x 6,240) / 3] = 912 units

annual total cost = [(6,240 / 912) x $200] + [(912 / 2) x $3] = $1,368.42 + $1,368 = $2,736.42

if we used EOQ = 763, then:

annual total cost = [(6,240 / 763) x $200] + [(763 / 2) x $3] = $1,635.65 + $1,144.50 = $2,780.15

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.